Consultants that help states navigate the complex process of receiving federal disaster aid are under scrutiny by an advisory panel led by top Trump administration officials for potentially slowing down recovery efforts to increase their fees.
The Federal Emergency Management Agency advisory panel said consultants take “a substantial part” of disaster funding received by their clients — state and local governments — as fees for helping them get the money.
The firms are potentially delaying rebuilding efforts intentionally “to maximize management costs,” according to a copy of a Dec. 11, 2025, FEMA Review Council report obtained by POLITICO’s E&E News.
An earlier draft of the report calls the “specialized industry” of consultants a “Disaster Industrial Complex.”
The criticism, which has not been previously reported, is aimed at private firms whose fees have amounted to billions of dollars in disaster aid as they’ve become integral to rebuilding after hurricanes, floods, wildfires and other catastrophes.
“The primary incentive for contractors is to maximize billable hours, not to expedite recovery,” says the report by the 13-member review council.
President Donald Trump created the panel last year after threatening to abolish the agency. The report also expresses concerns about a growing trend of FEMA employees taking jobs with major consulting firms.
“This raises questions about whether former officials leverage insider knowledge and connections for private gain,” says the report, which has not been made public.
The attack on consultants is a small part of the 75-page report that recommends reducing federal disaster spending for states while lowering FEMA staffing levels. The council, led by Homeland Security Secretary Kristi Noem and Defense Secretary Pete Hegseth, is made up mostly of state and local officials and includes no consultants.
FEMA said in a written statement that the report “is an iterative process” and “not subject to public disclosure.” It noted that Trump recently extended the council two months beyond its initial Jan. 24 expiration date.
Concerns about consultants are not isolated to the Trump administration. Two former FEMA administrators who are not on the review council told E&E News they had seen the effects firsthand.
“During my time, it was a big frustration at FEMA,” said Deanne Criswell, who led the agency under former President Joe Biden. “Contractors ended up dictating the pace of recovery, and as we know, not all contractors bring the same capacity.”
Peter Gaynor, who ran FEMA during the first Trump administration, recalled seeing one contractor “slow-rolling government” efforts to help the U.S. Virgin Islands recover after Hurricanes Irma and Maria in 2017.
“They did not care about recovery,” Gaynor said in an interview. “All they cared about was making more money. If they could stay there longer and have the Virgin Islands pay the bills, that was in their interest.”
The FEMA Review Council was scheduled to vote on the report on Dec. 11, but the White House canceled the meeting moments before it was to start. A new vote has not been scheduled.
The final report closely resembles an 89-page draft dated Nov. 3, 2025, although the phrase “Disaster Industrial Complex” was removed from the final report. The strong similarity between both versions of the report raises questions about news reports that said Noem had slashed a 160-page draft written in early November to 20 pages. The news reports prompted congressional action.
The final report recommends that FEMA “increase direct technical assistance” to states to “reduce the reliance on third party contractors.” Its call for offering more help to states came even as the report suggested cutting FEMA staff in half.
Consulting fees account for a small but growing share of FEMA disaster payments, an E&E News analysis of agency spending shows. The fees and other administrative expenses related to rebuilding are called “disaster management costs” in agency parlance.
FEMA reimbursed states $1.8 billion for those costs between 2002 and 2016 — accounting for about 3 percent of the agency’s total spending on disaster cleanup and rebuilding.
Costs rose dramatically beginning in 2017. Since then, the agency has spent $11.5 billion on management costs — roughly 6 percent of FEMA’s total rebuilding payments.
The review council blames the growth in part on the complexity of FEMA programs, which require extensive documentation from states before the agency will reimburse them for the cost of rebuilding.
“This complexity has fostered a specialized industry of consultants and contractors,” the report says, adding that it has led to “a shift from using government staff to private contractors in exorbitantly high numbers.”
Contractors are ‘necessary’
The review council overlooked other factors that could have increased consulting expenses.
A 2018 law signed by Trump in his first term increased FEMA reimbursements for consultants by expanding the definition of “management costs.” It was done at the request of states, said Michael Coen, a former FEMA chief of staff under Biden.
The larger reimbursements did not begin flowing until 2019. But Trump enacted the legislation as a huge portion of disaster aid was being directed to the Virgin Islands and Puerto Rico in 2017 and 2018 following Hurricane Maria. Both U.S. territories were inexperienced in disaster recovery, leading them to hire an unusually large number of consultants.
“Harvey, Irma and Maria were more intense and affected more critical infrastructure,” Coen said, referring to three hurricanes in 2017, including Harvey, which caused heavy damage in southeastern Texas. “It required a larger recovery effort on behalf of the states and federal government.”
Coen called contractors “a good option” for states that have a small number of floods, hurricanes, wildfires and other disasters. “It’s harder for state and county emergency managers to justify to their legislature why they need staff when you can hire these contractors.”
Gaynor, who ran the Rhode Island Emergency Management Agency before joining FEMA in 2018, said his state needed to hire consultants because it had only one disaster-recovery specialist.
“We just don’t have the bandwidth at the state government,” Gaynor said. “Contractor support is necessary.”
Gaynor and Coen both downplayed the review council’s concerns about former FEMA officials taking jobs with disaster management firms, noting that federal employees routinely go to the private sector, where salaries are higher.
“Where do retired Navy admirals go? They go to Lockheed, they go to shipbuilding. They’re experts in it,” Gaynor said. “I’m sure there are a few [FEMA officials] using their former position to make money in an unethical or immoral way. I think it’s very very narrow.”
Coen said, “A very small percentage of employees go from FEMA to being a private contractor.”
The review council’s report says ethics rules “could be reinforced” for FEMA employees who go to the private sector, potentially by extending the “cooling off” period that forbids officials from contacting their former agencies for one year.
“It’s easy to be critical of contractors,” Coen said. “No one wants to pay a contractor — just like you don’t want to pay the plumber when [they] come to your house because you know it’s going to be a high bill. But it’s necessary to get the job done.”
